Alert: Ivan Menezes Named COO

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FILED FEBRUARY 29, 2012

Dear Client:

Diageo has named Ivan Menezes, 52, chief operating officer. Note that Ivan is currently president of Diageo North American and chairman of Diageo Asia Pacific and Latin America & Caribbean. The new appointment goes into effect on March 1. Diageo also promoted Larry Schwartz from president of Diageo USA to replace Ivan as president of Diageo NA. Ivan became president of Diageo NA in 2004.

Now analysts are viewing Ivan as the natural successor to Paul Walsh, 56, as ceo when he eventually steps down. Reports Reuters: "Walsh, who turns 57 in May, is expected to remain in his role until the summer of 2014 to see his three-year drive to increase sales, margins and earnings through to completion. If the strategy were to progress well, he may leave earlier." Already there are parallels between the two. Recall that Paul was appointed coo of Diageo at the start of 2000 and took over as ceo from John McGrath 9 months later.

"Though no timeframe is given or implied, we assume this means a 12-18 month opportunity to assess the internal candidate before he is presumably benchmarked against external candidates for the top job ... some time next year," said analyst Charlie Mills at Credit Suisse.

"Given our strong performance momentum and the scope and scale of our ambition, the Diageo Board and I agree that now is the right time to extend Ivan's remit to embrace all of our markets globally," said Diageo chief Paul Walsh. "Ivan has a track record of delivery throughout his eight year leadership in North America and more recently in Asia Pacific and Latin America & Caribbean, and I am confident that Ivan can sustain and develop the performance momentum we demonstrated in our half year results as he broadens his responsibilities."

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